28.302
Notice of cancellation or change
Contractors must ensure insurance policies include a written notice requirement for cancellations or changes, and obtain approval before altering self-insurance coverage.
Overview
FAR 28.302 establishes requirements for contractors to notify the Government of any cancellation or material change in insurance coverage when such coverage is required by the contract. Insurance policies must include an endorsement ensuring that no cancellation or significant change affecting the Government’s interest becomes effective without prior written notice to the Government, as specified by the contracting officer. For contractors using self-insurance, any reduction or change in coverage requires prior approval from the administrative contracting officer, referencing FAR 28.308(c).
Key Rules
- Insurance Policy Endorsement
- Policies must include an endorsement mandating written notice to the Government before any cancellation or material change affecting the Government’s interest.
- Written Notice Requirement
- The insurer or contractor must provide written notice of cancellation or change as required by the contracting officer.
- Self-Insurance Changes
- Contractors using self-insurance cannot change or decrease coverage without prior approval from the administrative contracting officer.
Responsibilities
- Contracting Officers: Specify notice requirements and review/approve changes to self-insurance.
- Contractors: Ensure insurance policies have the required endorsement and provide timely written notice of changes or cancellations; obtain approval before altering self-insurance.
- Agencies: Oversee compliance and ensure Government interests are protected.
Practical Implications
- This section protects the Government from unexpected lapses or reductions in insurance coverage.
- Contractors must proactively manage insurance documentation and communication to avoid compliance issues.
- Failure to provide proper notice or obtain approval for changes can result in contract violations or increased risk exposure for both parties.